Weekend reading: Stamina versus sprinting when investing

Posted By
The Investor
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July 13, 2013 @ 9:37 am
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Good reads from around the Web.

I really liked an analogy from blogger Random Roger that I read this week. In an article stressing that investing is about long-term results, Roger writes[1]:

One comment we’ve heard several times in this year’s Tour de France is that they can’t win the Tour today but they can lose it today.

And this relates to investing.

You cannot ensure that you will have enough money when you need it by having a good month, quarter or year, but it is possible to seriously jeopardize your ability to have enough when you need it with certain behavior.

Can you remember how much you were up in March 2010? Or whether you beat the market (if that’s your aim) in 2007?

Very unlikely. Even if you do keep detailed records, you’re either a savant or you’ll need to consult your files before answering.

Yet how much does the typical news-obsessed investor sweat when the market falls 5%?

These short-term oscillations matter a lot to fund managers and financial journalists, but they don’t mean much in the long run. What goes up usually comes down almost as far on a day-to-day basis. Often enough by tomorrow!

It’s over the months and much more so the years that the gains really add up.

So forget winning the yellow jersey. Keep your eyes on the finish line!

Book of the week: Simon Lack’s new book on the end of the 30-year bond bull market, Bonds Are Not Forever[31], is available for pre-order on Amazon, ahead of its early September release date. Nice timing.

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